Multinationals as Foreign Agents of Change in the Third World

Tavis, Lee A.
September 1983
Business Horizons;Sep/Oct83, Vol. 26 Issue 5, p2
Academic Journal
Multinational corporations are the lightning rods which attract much of the world's frustration over the economic and social conditions of poor peoples and countries. The affluence which these firms represent contrasts sharply with the poverty of the countries in which they are located. Third World peoples know that they are poor and we are not. They see us on television, read about our "good life" in newspapers and magazines, and watch our workers in their countries. For most of these people, their best is not as good as our worst. The vast majority of them live in squalor, as have their parents and grandparents, and have no hope of getting out. Sometimes their frustrations boil over, and the local multinational corporation is a convenient target. The same holds for the Third World host governments: those concerned with improving the living conditions of their peoples, those who see global development as a zero-sum game with the developed countries gaining at the expense of the less fortunate, or for the political opportunist. In fact, people in the less-developed part of our world don't live very well. Although they make up three-fourths of the world's population, they consume less than one-fourth of its resources. More than 700 million people are classified as destitute; it is estimated that 70 percent of the children suffer from malnutrition; as many as 300 million people are physically or mentally retarded as a result of inadequate diets. Multinationals help to alleviate these conditions. As the economic link between the disparate segments of our world, multinationals transfer productive capability from the industrialized economies to those not so far along in their development process. These firms bring an ability to develop and apply technology, and to infuse managerial skills. They excel in training laborers. Multinationals work with local suppliers, helping them to meet quality specifications. They provide access to capital markets and the importa...



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